Legislation moving through the state Senate would allow the City of Huntsville to turn the 1,500-acre Sewell farm, indicated by the dotted red lines on this aerial map, into a major manufacturing tax increment finance zone. (Image courtesy Barge Waggoner Sumner & Cannon)

HUNTSVILLE, Alabama -- The City of Huntsville's quest to lure a major employer to a proposed TVA Megasite off Greenbrier Road may get a boost from Montgomery.

A state Senate budget panel unanimously approved a bill Wednesday that broadens current tax increment finance, or TIF, laws to include large industrial sites capable of attracting more than $100 million in private investment.

The bill would allow Huntsville to borrow money up front to buy land, improve roads, add water and sewer lines, and even construct manufacturing facilities at the 1,500-acre Sewell farm -- then use the anticipated increase in property tax collections to repay the loan.

"It just gives us another tool to attract industry," Huntsville Economic Development Director Michelle Jordan said Wednesday. "The hope for us is that we're now a little more competitive with our neighbors to the north, south, east and west."

Under the bill, any Alabama city could create a "Major 21st Century Manufacturing" TIF zone for automotive, aviation, medical, pharmaceutical, semiconductor, computer, electronics, energy conservation, cyber technology or biomedical companies willing to invest a minimum of $100 million on a site larger than 500 acres.

State Sen. Arthur Orr, R-Decatur

"We wanted to set the bar high enough so only projects that have a significant economic impact are able to qualify," state Sen. Arthur Orr, R-Decatur, the bill's co-sponsor, said Wednesday.

Orr said he introduced the TIF bill at the request of Huntsville officials; the first draft applied only to the Rocket City and Montgomery.

But the Senate Finance and Taxation General Fund Committee amended the bill Wednesday morning to include every Alabama city. It now moves to the full Senate for consideration.

"I'm working to get it voted on quickly," Orr said, "because it's important to Huntsville -- and now municipalities across the state."

"I would hope my colleagues would see the need to enable our local economic developers with every tool possible to recruit and attract new business," he said.

City Attorney Peter Joffrion said a handful of large industrial sites in Huntsville could potentially qualify as major manufacturing TIF zones, including the Sewell and McDonald farms in southeast Limestone County and North Huntsville Industrial Park on Pulaski Pike.

However, Joffrion said the city could create a TIF zone only if it has a large employer lined up. Depending on the location, the idea would have to be approved by the City Council and either the Madison County Commission or Limestone County Commission.

In 2008, Volkswagen seriously considered building its first U.S. automotive plant on the Sewell farm before choosing a site in Chattanooga.

VW's luxury brand, Audi, and Volvo are both currently in the market for American manufacturing sites. Volvo CEO Stefan Jacoby is familiar with the Sewell property from his previous job as head of Volkswagen's U.S. operations.

"The Huntsville leadership learned a lot from the VW negotiations, and they are wisely planning for future economic development prospects with this legislation," said Orr, whose district includes the Sewell farm.

State Sens. Bill Holtzclaw, R-Madison, and Clay Scofield, R-Guntersville, are also sponsoring the TIF major manufacturing bill.

Huntsville has created five previous TIF districts to stimulate new investment, giving rise to Parkway Place Mall, the Target shopping center on University Drive, the Toyota engine plant, new roads, a series of public improvements downtown and four new city schools -- Providence K-8 plus Columbia, Huntsville and Lee high schools.

The Target and Columbia High-Providence TIFs were paid off early because property tax revenues within the districts grew faster than anticipated.